## Facts

- Duke Energy operated coal-fired electric generating units in North and South Carolina.
- Beginning in 1988, Duke undertook 29 projects at eight plants to replace or redesign components and extend unit life and operating hours.
- The projects were expected to increase total annual emissions by allowing more hours of operation, even if the hourly emission rate did not increase.
- Duke did not obtain Prevention of Significant Deterioration (PSD) permits for the projects.
- The United States brought an enforcement action alleging Duke violated PSD by undertaking “major modifications” without permits; environmental groups intervened in support of the government.

## Issues

1. Whether Clean Air Act § 307(b) barred the court of appeals from addressing, in an enforcement case, the meaning of “modification” as used in PSD regulations.
2. Whether the Clean Air Act’s incorporation of the NSPS statutory definition of “modification” into the PSD program required EPA to interpret and apply “modification” identically in both programs (hourly-rate test for NSPS and PSD).

## Decision

- The Supreme Court vacated the Fourth Circuit’s judgment and remanded.
- The Court held that the statutory cross-reference to a single definition of “modification” did not require identical regulatory implementation of that definition in the NSPS and PSD programs.
- The Court rejected the argument that § 307(b) deprived the Fourth Circuit of authority to consider the interpretive question in the enforcement context because the court was construing regulatory language rather than entertaining a direct, time-barred challenge to the validity of national rules.

## Legal Principles

- Identical statutory language used in different Clean Air Act programs does not, by itself, compel identical regulatory tests if the statute does not clearly impose that constraint.
- EPA may operationalize the statutory concept of an emissions “increase” using different measurement approaches across programs (e.g., hourly emission rate for NSPS and actual annual emissions for PSD) when consistent with each program’s structure and purpose.
- Clean Air Act § 307(b) channels direct challenges to national regulations to the D.C. Circuit within specified time limits, but does not prevent courts in enforcement actions from interpreting regulations and related statutory terms as applied.

## Conclusion

The Court held that the Clean Air Act did not force EPA to use the same metric for “modification” under NSPS and PSD and that the enforcement case could proceed without treating the interpretive dispute as a barred collateral attack on national regulations, so the case was vacated and remanded for further proceedings under the proper legal standard.


Environmental Defense v. Duke Energy Corp., 549 U.S. 561 (2007)